I got a question via emai from a reader today and figured i’d answer it publicly
First off, you have an awesome blog and your Local Online Advertising related articles are really helpful. Your post are inspiring and by doing some testing I have run into a weird situation. Perhaps you could provide me with a hint or two.
On Facebook, if I bid on a CPC basis, I get a CTR of 0.089 to 0.1. Now, for the same add, if I bid on a CPM basis get plenty of impressions but my CTR is suddenly at 0.010% to 0.012%.
I have tested it with different add variations, and if I found a winning add combination, stopped it and created a new add based on a CPM model my CTR is suddenly down.
have you noticed similar patterns? Have you found a solution, or perhaps have any tip?
By the way, if you want to try or test anything on the German market, I can help with any translation.
It’s a very legitimate question for a new Facebook Ads advertiser to ask. In the past, this wasn’t the case. If you converted a CPC ad to a CPM ad the click through rate would be pretty similar. In fact a lot of affiliates were doing this to get cheaper ads by bidding CPM. Around a year ago, Facebook made a change to their advertising system which rewarded CPC advertisers with more clicks and CPM advertisers with more impressions. I guess their logic was that CPC advertisers wanted only clicks and CPM advertisers wanted only impressions (which we all know isn’t true). The way they seem to accomplish this is by running CPM advertisers in lower quality positions. Here is the letter Facebook sent out around that time.
Upcoming system change:
As you know, we continuously work to make our ads system more accurate in order to further improve the effectiveness of your advertising campaigns. Among other ongoing improvements, we are refining our ads delivery system to better reflect the goals of our advertisers. This change will take place over the next few weeks and, assuming current bids remain unchanged, will mean that:
CPC advertisers (advertisers who have chosen to bid “cost-per-click”) may receive more clicks.
CPM advertisers (advertisers who have chosen to bid “cost per thousand impressions”) will continue to receive impressions but may receive less clicks.
Do I need to do anything?
As a CPM advertiser, you are indicating to our system that it’s more important that your ad is seen by your audience rather than clicked i.e. you have chosen to pay for impressions, not clicks. If your main objective is to increase awareness of your business with an ad impression, there is no need for action. However, if your most important objective is to drive clicks on your ads, you should change your bids from CPM to CPC.
I hope that answered your question.